New works agreement seeks to save production sites and employment at Bayer AG
A new works agreement at Bayer, signed in June 1997, guarantees employment in return for further cuts in labour costs.
On 20 June 1997 the management of one of Germany's leading chemical companies, Bayer AG, and the company works council (Gesamtbetriebsrat) - politically supported by the chemical workers' union, IG Chemie-Papier-Keramik- signed a new works agreement to save production sites and employment in Germany. The central aim of the agreement is to guarantee production at the five German Bayer plants in Leverkusen, Dormagen, Uerdingen, Elberfeld and Brunsbüttel.
In the new works agreement, Bayer management commits itself to new investments in German plants at a minimum level of DEM 3.8 billion each year until the end of 2002. Of this annual total, about DEM 1 billion should be invested in new technologies and equipment, DEM 1.3 billion in investments for maintenance and DEM 1.5 billion in research and development.
Furthermore, the management agreed that there will be no redundancies (betriebsbedingte Kündigungen) until the end of 2000. Nevertheless, Bayer also declared that it wants to reduce its current workforce of about 45,000 employees by 10% during that time. The management hopes to reach that aim by using natural fluctuation of employee numbers and partial retirement, as well as offering "contracts for dissolution" (Auflösungsverträge) to some of the employees, involving compensation for job loss.
Finally, the management declared that it will offer at least 800 vocational training places each year until the end of 2002 and will guarantee every vocational trainee who finishes training a full-time permanent job at Bayer.
In return, the company works council has agreed to further reductions in labour costs by cutting or removing several social benefits which have hitherto been paid voluntarily by the company above the collectively agreed rate. The cost reductions include
- the removal of the individual bonus paid according to the length of service of an individual employee (Treueprämie);
- the removal of the former special offer to the employees to buy company shares;
- the reduction of the company's annual bonus by DEM 126 million;
- the removal of special holidays for employees who have reached a certain length of service (Jubiläumsurlaub);
- a further flexibilisation of working time by using individual "working time corridors";
- the removal of former paid special breaks for shiftworkers; and
- a new provision which makes it easier for the company to transfer employees inside the company.
All in all, Bayer hopes to save about DEM 300 million each year with the adoption of this new works agreement.